Automotive Parts Manufacturer Cuts Inventory by 22%

How a mid-size automotive parts manufacturer optimized inventory across multiple product lines, reducing carrying costs by $1.8M annually while improving supplier relationships and production efficiency.

Industry: Manufacturing / Automotive

Company Size: $850M Revenue

Implementation: 5 months

Solution: GoodStock Pro

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The Challenge

This mid-market automotive parts manufacturer supplies components to major OEMs and aftermarket distributors. With 12,000 SKUs across multiple product lines, complex supplier relationships, and volatile demand patterns, they struggled to maintain optimal inventory levels.

Key Problems:

Product line complexity: Multiple product lines with varying demand patterns and lead times
Excess safety stock: Over-conservative inventory policies tied up $48M in unnecessary stock
Stockout incidents: Critical parts shortages caused production delays and customer dissatisfaction
Manual forecasting: Spreadsheet-based planning couldn't handle 12,000 SKUs effectively
Supplier variability: Inconsistent lead times from suppliers complicated planning

"We were constantly putting out fires. One day we'd have too much of one part, the next day we'd run out of another critical component. It was costing us money and damaging customer relationships." VP of Operations

$48M

Excess Inventory

12,000

SKUs

200+

Suppliers

92.8%

Service Level

The Solution

The company selected GoodStock Pro for its sophisticated SKU-level optimization capabilities, supplier lead time variability modeling, and proven success with automotive manufacturers.

Analysis & Configuration (Month 1-2)

Conducted comprehensive SKU segmentation using ABC analysis. Mapped supplier lead time patterns and identified optimization opportunities across all product lines.

System Integration (Month 2-4)

Integrated GoodStock Pro with existing ERP and procurement systems. Configured custom optimization parameters for each product line based on demand volatility and supplier reliability.

Rollout & Optimization (Month 4-5)

Phased rollout across product lines with continuous monitoring. Trained procurement and operations teams on the new data-driven approach to inventory management.

Key Features Implemented:

📊 ABC Analysis

Automated SKU segmentation to optimize inventory policies based on value and demand patterns.

🎯 Dynamic Safety Stock

AI-powered safety stock calculations that account for demand variability and supplier lead time uncertainty.

🔄 Supplier Lead Time Modeling

Advanced algorithms that model supplier variability and optimize reorder points accordingly.

⚡ Automated Replenishment

Smart reorder point calculations with automated purchase requisition generation.

The Results

The implementation delivered outstanding results, significantly reducing inventory costs while improving service levels and operational efficiency.

-22%

Inventory Reduction

From $218M to $170M inventory value

$1.8M

Annual Savings

Net carrying cost reduction

97.5%

Service Level Achievement

Up from 92.8% baseline

$48M

Cash Released

Working capital freed up

Detailed Impact Analysis:

Financial Impact

$48M reduction in inventory value
$1.8M annual carrying cost savings
Improved cash flow and ROIC
ROI achieved in 4.8 months

Operational Impact

97.5% service level achievement
52% reduction in stockout incidents
35% reduction in excess inventory
Streamlined procurement processes

Strategic Impact

Stronger supplier relationships
Improved customer satisfaction
Better production planning
Data-driven decision making

"GoodStock Pro transformed our inventory management from reactive firefighting to proactive optimization. The 22% inventory reduction while improving service levels was beyond what we thought possible. Our procurement team now has the tools they need to make smart, data-driven decisions."

VP of Operations Mid-Market Automotive Parts Manufacturer $850M Revenue, 12,000 SKUs